The Irish Bank Officials Association has called on Ulster Bank chief Cormac McCarthy to reassure staff that their jobs and pay are secure.
This comes after the bank's parent, Royal Bank of Scotland (RBS), today announced a record £12 billion sterling rights issue to cover a potential £5.9 billion writedown of the value of bad assets.
RBS also said it would sell assets to generate £4 billion this year, mostly from the possible disposal of all of, or a stake in, its insurance arm, which includes brands Direct Line and Churchill.
The IBOA wants a guarantee that the terms and conditions of staff at Ulster Bank will be maintained. The union says that, given the substantial nature of the funds that RBS is now looking for, some assets may be sold off in the process. 'We are seeking immediate clarification of the status of Ulster Bank within RBS,' it said.
The IBOA's call comes after an internal memo was circulated at the bank today, in which Cormac McCarthy advised all staff on how to handle questions from customers about RBS's group rights issue. Just under 7,000 people work at Ulster Bank in Ireland, and around 70% of those are IBOA members.
The IBOA has a scheduled meeting with Ulster Bank management on Thursday morning, where it will seek further reassurances than it received in today's staff memo.
RTE News has seen the memo. It provides answers to questions including: 'What is a rights issue?'; 'Can we give customers a guarantee their money is safe with us?'; and 'is RBS a Northern Rock on a bigger scale?'
RBS's moves come as the group seeks to improve its capital base following last year's near £50 billion acquisition of Dutch Bank ABN Amro, and billions of pounds of investment write-downs. 'This is a difficult time for the financial services industry, and it has presented us with specific challenges,' said RBS chairman Sir Tom McKillop.
RBS's capital raising comes a day after the Bank of England announced details of a £50 billion scheme to end the credit crunch by allowing banks to swap their mortgage-backed assets with Government bonds.
